UBS: Micron’s Long-Term Contracts Are Solid Enough to Withstand Potential Market Downturns in the Coming Years

Odaily Odaily reports that UBS analysts stated in a research report that Micron Technology’s long-term contracts with customers are sufficiently solid to withstand any market downturn for at least the next few years. Investors may worry that these contracts could weaken if the market slows down, but the minimum prices set in the contracts are low enough that sufficient supply will not come online to break price floors and prompt customers to consider default until at least 2029, and more likely 2030.

UBS analysts also noted that Micron Technology has received prepaid cash from customers, which could ultimately approach $40 billion to $50 billion. If the situation deteriorates, this could serve as a substantial buffer against违约金 (penalty fees for breaching contracts). (Jin Shi)